There’s a little over one month to go until the deadline for contributing to a Stocks and Shares ISA for this tax year. With that being the case, I’ve recently been selecting UK shares to buy to add to my ISA. Here are three companies I’ve been considering.
Stocks and Shares ISA potential
I think GlaxoSmithKline (LSE: GSK) is one of the best UK shares to buy for an ISA. There are two reasons why. First of all, the company is an FTSE 100 dividend payer. At the time of writing, its dividend yield stands at around 6%.
Thanks to the tax-efficient nature of ISAs, I think it would be best to hold this asset inside one of these wrappers. However, this will vary from investor to investor, depending on each investor’s tax situation. What’s more, this dividend is not guaranteed. Companies can and do eliminate dividend payouts to investors at a moment’s notice. Glaxo is no exception.
Still, I would buy this business for its long-term potential. As one of the largest healthcare companies in the UK, I think the business is well-positioned to benefit from the growth of the healthcare industry in the long run. That’s the second reason why I would buy this firm for my Stocks and Shares ISA.
UK shares to buy today
Two other UK shares I have my eye on are retailer Morrisons (LSE: MRW) and oil group BP (LSE: BP). Both of these businesses face challenges as we advance, but there could also be opportunities. I like both companies because they have shown a willingness to return lots of cash to investors when profits are rising.
Of course, these corporations won’t always be flying high. Last year BP announced one of the most considerable losses in UK corporate history as the oil price collapsed. The company may also return less cash to investors as we advance since it has committed tens of billions of dollars of spending to renewable energy initiatives over the next decade. By spending this cash, the group will hopefully be able to guarantee its future in a world without oil and gas.
Morrisons has also faced headwinds over the past 12 months. Challenges such as rising costs and supply chain disruption have impacted the company. It’s unlikely these will be one-off issues. Management may have to deal with similar problems in the future.
Nevertheless, I believe that these are some of the best UK shares to buy for a Stocks and Shares ISA because they have tremendous income potential.
At the time of writing, shares in Morrisons support a dividend yield of 4.8%, and shares in BP yield 5.2%. These are only forecasts at this stage, and there’s no guarantee investors will receive this level of income. However, I believe it shows the income potential of these firms. That’s why I would buy Morrisons and BP for my ISA today.
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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Morrisons. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.